SayaG,
It sounds like you are asking all the right questions. From my experience, I know you can go into remission (yes, that is the right word), but unfortunately it may take time until your GI and your body figure it all out. I get chronic constipation, followed by a day or two of diarrhea. I have met many people who are constipated instead of having diarrhea.
When your doctor said to "keep him posted" I doubt he meant every time, my doctor usually means to keep track and tell him generally how things are going. Also, if the bleeding doesn't subside or if it gets worse, definitely talk to your doctor right away.
As far as piece of mind from cancer, make sure you get colonoscopys as recommended to keep it in check. As long as you keep up with preventative care, most colon cancer is preventable or containable. (from my reading at least, and from the profuse amount of colon cancer that runs in my family)
As far as your stomach size and constant pressure, you will feel some relief when you finally go to the bathroom...however, I always have fluctuations in stomach swelling because of the variance between constipation and diarrhea. Also, I have yet to be pain-free for any length of time since being diagnosed....but I found that my definition of "pain" has changed and I'm able to tolerate it much more. Additionally, there are meds that help with the pain, so ask your doctor about that.
Please know that this community is a great resource of people and experience and that we care about you, so keep us updated!